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FDIC To Tap Bank Reserves

Markets Media Online
The Federal Deposit Insurance Corp., the agency responsible for dealing with failed banks, is itself in danger of failure. The FDIC is seeking to require banks to prepay their estimated quarterly risk-based assessments for the fourth quarter of 2009 and all of 2010, 2011 and 2012, an amount totaling $45 billion, and to impose a 3 point increase in assessment rates beginning in 2011.

The Deposit Insurance Fund (DIF) is in the red, reflecting an increase in provisioning for anticipated failures. Without the prepayments, the fund will remain negative until 2018.

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